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Irrational Bank Loyalty - Part 2: Banks and the Accidental Brand

Oops I guess we have a brand" -  Accidental Branding

The opposite of intended branding -Awareness, Identity, Advertising and PR as we discussed in Part 1- is what I call "accidental branding" and this would be the total experiences and emotions that a bank has created and responses it has elicited in its customers without meaning to, over time. Some of it is intrinsically positive but most is not. Stands to reason that the latter should be amplified and the former minimised as soon as we dissect which one is which.

This is where things become truly interesting and banks really should make it a serious to do to explore this in painstaking detail. A really serious to do. Not one of the "P.S. tasks" at the end of long strategy execution and implementation plans after all regulatory, compliance and security to dos and at the end of the unattainable "fluffy" digital and cultural change goals but top of the list: "To find out why our customers won't leave and how to make them love us". Below are a few examples of this but this is by no means exhaustive, it should simply be seen as a teaser list to start us off.

A lot of the banks' brand capital has to do with "tradition". The definition of the term in this context is worth exploring as it includes key terms such as "respect", "identity", "safety", "nostalgia", "heritage, "reputation" and the all-star-term of banking: "trust". Tradition is of course not intentional branding but it can become so - brands are studying tradition and the smart ones are capitalising on its huge potency to bridge with new generations.

Some of the banks' brand capital has to do with "fear". Sheer loathing of going through the process of change. It cannot be underestimated despite the great lengths switching campaigns have been through to both make the process simple and to communicate its simplicity effectively to the public. Realistically, to overcome the fear of change when it comes to something as life critical as one's bank account, most people need to invest upfront, a disproportionate amount of ad-hoc trust in the competing offering being exponentially better and that's a huge ask. I can only hope that Challenger Banks have taken this issue to heart and have done all the homework they can on this.

"Paralysis" is for better or worse part of the brand capital a bank still has today by nature of the service. In banking services are bundled and securely tie consumers to one provider. It's a beautifully captive consumerism model high street brands can never ensure. While I can sometimes cheat on my intense relationship with Ted Baker by buying the odd Louboutin on eBay or even by nipping into Next or Primark on a whim, I can't as readily decide to save my money for the day with someone other than NatWest. This is changing, if you look at payments as a behavioural issue and you see people electing to use PayPal, Venmo or even Apple Pay over their bank's app or card, the fact that the rails are the same is irrelevant as the brand loyalty coins fall in the jar of these brands not that of their banks.

"Golden service hacks" - it's sad that this is accidental but it's one of the few positives along with "tradition" so it's worth mentioning. Whether by wanting to be innovative or by wanting to show change some banks have sometimes hit on improvements so grand that they've have been transformative to people's lives and have boosted their brand capital. At times it's been as small as Bank Simple's famous "Free-to-spend" feature allowing people to see what's left that they can spend when they do a balance enquiry, or as complex as offering consumers the ability to see all of their bank relationships in one place as Bank of America pioneered in the US. In other industries, offering a disproportionate amount of value or extreme ease of use is intentional and designed as brand addictive (the other night Alton Towers sold me a "no questions asked, in case it rains or you no longer fancy it" 36 hours cancellation policy on a vacation for seven quid, I'm in love despite the maiming potential!).

On a great comments thread about this someone mentioned "entanglement" as a part of the branding. This can mean so many things - everything from an unhealthy Stockholm syndrome where we hate our bank captors but we won't leave once the doors unlock to a positive mishmash of attitudes and feelings that are interwoven in our life fabric, and add to the positive brand capital pot. Bankers: if you're too busy with whatever else is on the list of "serious stuff" - at least mandate someone else to explore this, it will only pay off.

"We're doing just fine, thank you!" - Measuring Brand

The examples we talked about last week are built from near-scratch - in the grand scheme of things even ING Direct is a challenger let alone mBank and CheBanca. Smart, bold visionaries decided to start with the emotional connection in mind. With the excellence in engagement as the first brick. At building a lasting brand. Their Net Promoter Scores and other measurements no less those of their ever growing coffers demonstrate this was the correct strategy. No contest.

What of the giants though? What of the old school incumbents, of the oldest banks ever, what can they do to correct course? There are many voices to ask for them to spawn brands. And they have done so all over Europe (see Hello and Consors banks and BNP, Comdirect and Commerzbank, etc) and aside from the sad story of Egg there's a successful example in the UK: FirstDirect.

Yes it is head and shoulders above others in terms of customer satisfaction and people love it but at the risk of ruffling all feathers let's call a spade a spade - they have "Best Customer Satisfaction in the UK"... for a bank not for a brand. Our expectations in banking as a consumer have been lowered by every other provider to the point that decent treatment will render us ecstatic.

More importantly, if you look at its model intimately and if you examine its total number of customers acquired in what is now tens of years the results are far from stellar. I personally think it's a good example of why becoming a brand needs to be a transformative whole-bank process starting as a mindset at the top - HSBC has elected to do "Exceptional customer service as an experiment" not engage all its consumers but almost isolate those who needed to identify, belong and appreciate them in this corner of a design-led universe where services are the same as the mothership but the way they deal with problems exceeds expectations.

"All banks are the same" - Perceived Lack of Choice


"All men are the same" is the well known adage of battered women who choose to stay in a bad relationship - why attempt change if you don't believe in better and don't feel that there's an alternative? I bet a few of us instinctively thought that if we read the many "yet we won't leave" of Part 1. 

In the UK the rhetorics often goes like this "Go where?!? There's no choice, just different names and they offer the same thing! First Direct is still HSBC, TSB is Lloyds and the Challengers are not exactly out there yet!" -but realistically there are notable differences between these, maybe not in current accounts but in savings, investments, etc. Then there's nimble Metro, there's the incumbent of challengers, Santander, and there are the many other services you would need to only download the app of to nearly construct your own bank between Nutmeg, OnTrees, TransferWise, LendingClub and others although I recognise doing so requires a level of FinTech Geekery blissfully unbeknown to the general population.


"So what's the answer?"

I don't have formulas, there are great minds who struggle with how to understand branding intimately, and a lot of what banks are doing today will help even if again, accidentally, to improve the brand the don't even know they have, I would just like to see a serious dialogue started in banks on "How to become a Brand? And Fast!". Maybe the answer is to read more, explore more, copy more, dream more and feel more. Whatever it takes.



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